Skip to content
ENExplore Calculators

Burn Multiple Calculator

Divide net burn by net new ARR to see how much cash the business consumes per unit of growth.

About Burn Multiple Calculator

The ratio divides one figure by the other and is read against a conventional benchmark of 1.5. Both the ratio and its percentage form are shown, because different audiences expect different presentations of the same number. A efficiency multiple compresses two absolute figures into one comparable number, which is what makes it usable across companies and periods of different size.

Formula

Burn Multiple

Burn Multiple = Net cash burned in the period ÷ Net new ARR added

Net cash burned in the period
Numerator of the ratio
Net new ARR added
Denominator of the ratio

Worked example

With the default values below, Burn Multiple Calculator returns Burn Multiple of 1.500. Change any input above and every figure here is recalculated in your browser.

Inputs used

Net cash burned in the periodminimum 0
900,000
Net new ARR addedminimum 0
600,000

Results

Burn Multiple
1.500
Expressed as a Percentage
150.00%
Surplus Over the Benchmark
0.000
Inverse Ratio
0.667
Interpretation
Adequate — at or above the benchmark of 1.5

Step by step

  1. 1Values used
  2. 2Burn Multiple
  3. 3Burn Multiple= 1.500
  4. 4Expressed as a Percentage= 150.00
  5. 5Surplus Over the Benchmark= 0.000
  6. 6Inverse Ratio= 0.667
  7. 7Interpretation= Adequate — at or above the benchmark of 1.5

Assumptions and limits

  • The result is derived only from the 2 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or fees or charges into account.
  • Figures are rounded for display to 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Burn Multiple calculated?

Burn Multiple = Net cash burned in the period ÷ Net new ARR added The ratio divides one figure by the other and is read against a conventional benchmark of 1.5. Both the ratio and its percentage form are shown, because different audiences expect different presentations of the same number.

Why does Burn Multiple matter?

A efficiency multiple compresses two absolute figures into one comparable number, which is what makes it usable across companies and periods of different size.

What values do I need to enter?

This calculator takes 2 inputs: Net cash burned in the period, Net new ARR added. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.

Related Calculators

Burn Multiple Calculator – Calculate Burn Multiple